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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-15006

CELLDEX THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware

    

No. 13-3191702

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Perryville III Building, 53 Frontage Road, Suite 220, Hampton, New Jersey 08827

(Address of principal executive offices) (Zip Code)

(908) 200-7500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $.001

CLDX

Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer 

    

Accelerated filer 

Non-accelerated filer 

Smaller reporting company

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 

As of October 31, 2021, 46,663,872 shares of common stock, $.001 par value per share, were outstanding.

Table of Contents

CELLDEX THERAPEUTICS, INC.

FORM 10-Q

For the Quarterly Period Ended September 30, 2021

Table of Contents

 

    

Page

Part I — Financial Information

Item 1. Unaudited Financial Statements

3

Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020

3

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020

4

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3. Quantitative and Qualitative Disclosures About Market Risk

29

Item 4. Controls and Procedures

30

Part II — Other Information

Item 1. Legal Proceedings

31

Item 1A. Risk Factors

31

Item 5. Other Information

31

Item 6. Exhibits

32

Exhibit Index

32

Signatures

33

2

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

September 30, 

December 31, 

    

2021

    

2020

Assets

Current assets:

Cash and cash equivalents

$

72,184

$

43,836

Marketable securities

 

350,905

 

150,586

Accounts and other receivables

 

197

 

1,802

Prepaid and other current assets

 

3,269

 

1,619

Total current assets

 

426,555

 

197,843

Property and equipment, net

 

3,342

 

3,815

Operating lease right-of-use assets, net

3,016

3,449

Intangible assets, net

 

27,190

 

30,690

Other assets

 

98

 

41

Total assets

$

460,201

$

235,838

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

836

$

1,048

Accrued expenses

 

10,253

 

8,459

Current portion of operating lease liabilities

1,366

1,327

Current portion of other long-term liabilities

 

1,721

 

3,372

Total current liabilities

 

14,176

 

14,206

Long-term portion of operating lease liabilities

1,713

2,154

Other long-term liabilities

 

7,600

 

10,121

Total liabilities

 

23,489

 

26,481

Commitments and contingent liabilities

Stockholders’ equity:

Convertible preferred stock, $.01 par value; 3,000,000 shares authorized; no shares issued and outstanding at September 30, 2021 and December 31, 2020

 

 

Common stock, $.001 par value; 297,000,000 shares authorized; 46,663,340 and 39,603,771 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

47

 

40

Additional paid-in capital

 

1,557,576

 

1,279,824

Accumulated other comprehensive income

 

2,548

 

2,589

Accumulated deficit

 

(1,123,459)

 

(1,073,096)

Total stockholders’ equity

 

436,712

 

209,357

Total liabilities and stockholders’ equity

$

460,201

$

235,838

See accompanying notes to unaudited condensed consolidated financial statements

3

Table of Contents

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share amounts)

Three Months
Ended

Three Months
Ended

Nine Months
Ended

Nine Months
Ended

    

September 30, 2021

    

September 30, 2020

    

September 30, 2021

    

September 30, 2020

Revenues:

Product development and licensing agreements

$

$

12

$

29

$

2,297

Contracts and grants

 

153

 

656

 

4,288

 

1,336

Total revenues

 

153

 

668

 

4,317

 

3,633

Operating expenses:

Research and development

 

13,557

 

10,708

 

38,633

 

32,109

General and administrative

 

5,821

 

3,640

 

14,247

 

10,833

Intangible asset impairment

3,500

3,500

3,500

(Gain) loss on fair value remeasurement of contingent consideration

(1,901)

662

(1,160)

(4,236)

Total operating expenses

 

20,977

 

15,010

 

55,220

 

42,206

Operating loss

 

(20,824)

 

(14,342)

 

(50,903)

 

(38,573)

Investment and other income, net

 

145

 

118

 

313

 

465

Net loss before income tax benefit

(20,679)

(14,224)

(50,590)

(38,108)

Income tax benefit

227

227

228

Net loss

$

(20,452)

$

(14,224)

$

(50,363)

$

(37,880)

Basic and diluted net loss per common share

$

(0.45)

$

(0.36)

$

(1.21)

$

(1.44)

Shares used in calculating basic and diluted net loss per share

 

45,453

 

39,278

 

41,582

 

26,303

Comprehensive loss:

Net loss

$

(20,452)

$

(14,224)

$

(50,363)

$

(37,880)

Other comprehensive income (loss):

Unrealized (loss) gain on marketable securities

 

(44)

 

14

 

(41)

 

(11)

Comprehensive loss

$

(20,496)

$

(14,210)

$

(50,404)

$

(37,891)

See accompanying notes to unaudited condensed consolidated financial statements

4

Table of Contents

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(In thousands)

Nine Months
Ended

Nine Months
Ended

    

September 30, 2021

    

September 30, 2020

Cash flows from operating activities:

Net loss

$

(50,363)

$

(37,880)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

 

2,291

 

3,174

Amortization and premium of marketable securities, net

 

(3,407)

 

(422)

Gain on sale or disposal of assets

(23)

(29)

Intangible Asset Impairment

3,500

3,500

Gain on fair value remeasurement of contingent consideration

(1,160)

(4,236)

Non-Cash Income Tax Benefit

(227)

(228)

Stock-based compensation expense

 

5,813

 

2,658

Changes in operating assets and liabilities:

Accounts and other receivables

 

1,549

 

177

Prepaid and other current assets

 

(2,261)

 

(1,280)

Accounts payable and accrued expenses

 

1,757

 

864

Other liabilities

 

(3,855)

 

(1,491)

Net cash used in operating activities

 

(46,386)

 

(35,193)

Cash flows from investing activities:

Sales and maturities of marketable securities

 

129,000

 

55,600

Purchases of marketable securities

 

(325,342)

 

(183,394)

Acquisition of property and equipment

(895)

(1,305)

Proceeds from sale or disposal of assets

25

29

Net cash used in investing activities

 

(197,212)

 

(129,070)

Cash flows from financing activities:

Net proceeds from stock issuances

 

269,893

 

170,964

Proceeds from issuance of stock from employee benefit plans

 

2,053

 

218

Issuance of Term Loan

2,962

Payment of Term Loan

(2,962)

Net cash provided by financing activities

 

271,946

 

171,182

Net increase in cash and cash equivalents

 

28,348

 

6,919

Cash and cash equivalents at beginning of period

 

43,836

 

11,232

Cash and cash equivalents at end of period

$

72,184

$

18,151

Non-cash investing activities

Accrued construction in progress

$

46

$

63

See accompanying notes to unaudited condensed consolidated financial statements

5

Table of Contents

CELLDEX THERAPEUTICS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

(1)  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Celldex Therapeutics, Inc. (the “Company” or “Celldex”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the operations of the Company and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

These interim financial statements do not include all the information and footnotes required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited financial statements for the year ended December 31, 2020, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2021. In the opinion of management, the interim financial statements reflect all normal recurring adjustments necessary to fairly state the Company’s financial position and results of operations for the interim periods presented. The year-end condensed balance sheet data presented for comparative purposes was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future interim period or the fiscal year ending December 31, 2021.

At September 30, 2021, the Company had cash, cash equivalents and marketable securities of $423.1 million. The Company has had recurring losses and incurred a loss of $50.4 million for the nine months ended September 30, 2021. Net cash used in operations for the nine months ended September 30, 2021 was $46.4 million. The Company believes that the cash, cash equivalents and marketable securities at the filing date of this Form 10-Q will be sufficient to meet estimated working capital requirements and fund planned operations for at least the next twelve months from the date of issuance of these financial statements.

During the next twelve months and beyond, the Company may take further steps to raise additional capital to meet its long-term liquidity needs including, but not limited to, one or more of the following: the licensing of drug candidates with existing or new collaborative partners, possible business combinations, issuance of debt, or the issuance of common stock or other securities via private placements or public offerings. Although the Company has been successful in raising capital in the past, there can be no assurance that additional financing will be available on acceptable terms, if at all, and the Company’s negotiating position in capital-raising efforts may worsen as existing resources are used. There is also no assurance that the Company will be able to enter into further collaborative relationships. Additional equity financings may be dilutive to the Company’s stockholders; debt financing, if available, may involve significant cash payment obligations and covenants that restrict the Company’s ability to operate as a business; and licensing or strategic collaborations may result in royalties or other terms which reduce the Company’s economic potential from products under development. The Company’s ability to continue funding its planned operations beyond twelve months from the issuance date is also dependent on the timing and manner of payment of contingent milestones from the acquisition of Kolltan Pharmaceuticals, Inc. (“Kolltan”), in the event that the Company achieves the drug candidate milestones related to those payments. The Company, at its option, may decide to pay those milestone payments in cash, shares of its common stock or a combination thereof. If the Company is unable to raise the funds necessary to meet its long-term liquidity needs, it may have to delay or discontinue the development of one or more programs, discontinue or delay ongoing or anticipated clinical trials, license out programs earlier than expected, raise funds at a significant discount or on other unfavorable terms, if at all, or sell all or a part of the Company.

6

Table of Contents

The COVID-19 pandemic continues to have a major impact in the US and around the world. The availability of vaccines holds promise for the future, though new variants of the virus and potential waning immunity from vaccines may result in continued impact from this pandemic in the future, including supply chain and work force issues which could adversely impact our operations. To date, the Company has managed delays and disruptions without significant impact in planned and ongoing preclinical and clinical trials, manufacturing or shipping. Potential impacts to our business include delays in planned and ongoing preclinical and clinical trials including enrollment of patients, disruptions in time and resources provided by independent clinical investigators, contract research organizations, and other third-party service providers, temporary closures of our facilities, disruptions or restrictions on our employees’ ability to travel, and delays in manufacturing and/or shipments to and from third-party suppliers and contract manufacturers for APIs and drug product. Any prolonged negative impacts to our business could materially impact our operating results and could lead to impairments of our Intangible in-process research and development (“IPR&D”) assets with a carrying value of $27.2 million at September 30, 2021.

(2)  Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements on Form 10-Q for the three and nine months ended September 30, 2021 are consistent with those discussed in Note 2 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

In June 2016, the FASB issued guidance on the Measurement of Credit Losses on Financial Instruments. The guidance requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard will be effective for the Company on January 1, 2023. We are currently evaluating the potential impact that this standard may have on the Company’s consolidated financial statements and related disclosures.

7

Table of Contents

(3)  Fair Value Measurements

The following tables set forth the Company’s financial assets and liabilities subject to fair value measurements:

As of

    

September 30, 2021

    

Level 1

    

Level 2

    

Level 3

(In thousands)

Assets:

Money market funds and cash equivalents

$

66,929

$

66,929

Marketable securities

350,905

350,905

$

417,834

$

417,834

Liabilities:

Kolltan acquisition contingent consideration

$

7,107

$

7,107

$

7,107

$

7,107

As of

    

December 31, 2020

    

Level 1

    

Level 2

    

Level 3

(In thousands)

Assets:

Money market funds and cash equivalents

$

35,066

$

35,066

Marketable securities

150,586

150,586

$

185,652

$

185,652

Liabilities:

Kolltan acquisition contingent consideration

$

8,267

$

8,267

$

8,267

$

8,267

The Company’s financial assets consist mainly of money market funds, cash equivalents and marketable securities and are classified as Level 2 within the valuation hierarchy. The Company values its marketable securities utilizing independent pricing services which normally derive security prices from recently reported trades for identical or similar securities, making adjustments based on significant observable transactions. At each balance sheet date, observable market inputs may include trade information, broker or dealer quotes, bids, offers or a combination of these data sources.

The following table reflects the activity for the Company’s contingent consideration liabilities measured at fair value using Level 3 inputs for the nine months ended September 30, 2021 (in thousands):

Other Liabilities:

Contingent

    

 Consideration

Balance at December 31, 2020

$

8,267

Fair value adjustments included in operating expenses

 

(1,160)

Balance at September 30, 2021

$

7,107

The valuation technique used to measure fair value of the Company’s Level 3 liabilities, which consist of contingent consideration related to the acquisition of Kolltan in 2016, was primarily an income approach. The significant unobservable inputs used in the fair value measurement of the contingent consideration are estimates including probability of success, discount rates and amount of time until the conditions of the milestone payments are met. As of September 30, 2021, the weighted average probability of success used in calculating the fair value of contingent consideration was 48.0% (with a range of 5.1% to 68.6%), the weighted average discount rate was 5.6% ( with a range of 5.1% to 6.7%) and the weighted average amount of time until the conditions of the milestone payments are met was 4 years. Weighted averages are calculated based on the relative fair value of our contingent consideration obligations.

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During the three and nine months ended September 30, 2021, the Company recorded a $1.9 million and $1.2 million gain on fair value remeasurement of contingent consideration, respectively, primarily due to updated assumptions for the TAM program, changes in discount rates and the passage of time. During the three months ended September 30, 2020, the Company recorded a $0.7 million loss on fair value remeasurement of contingent consideration primarily due to changes in discount rates and the passage of time. During the nine months ended September 30, 2020, the Company recorded a $4.2 million gain on fair value remeasurement of contingent consideration primarily due to updated assumptions for CDX-3379 related milestones due to the discontinuation of the CDX-3379 program, changes in discount rates and the passage of time. The assumptions related to determining the fair value of contingent consideration include a significant amount of judgment, and any changes in the underlying estimates could have a material impact on the amount of contingent consideration adjustment recorded in any given period.

The Company did not have any transfers in or out of Level 3 assets or liabilities during the nine months ended September 30, 2021.

(4)  Marketable Securities

The following is a summary of marketable debt securities, classified as available-for-sale:

Gross Unrealized

Amortized

Fair

    

Cost

    

Gains

    

Losses

    

Value

(In thousands)

September 30, 2021

Marketable securities

U.S. government and municipal obligations

Maturing in one year or less

$

24,291

$

5

$

$

24,296

Maturing after one year through three years

75,314

2

(17)

75,299

Total U.S. government and municipal obligations

$

99,605

$

7

$

(17)

$

99,595

Corporate debt securities

Maturing in one year or less

$

183,504

$

$

(10)

$

183,494

Maturing after one year through three years

67,844

8

(36)

67,816

Total corporate debt securities

$

251,348

$

8

$

(46)

$

251,310

Total marketable securities

$

350,953

$

15

$

(63)

$

350,905

Gross Unrealized

Amortized

Fair

Cost

    

Gains

    

Losses

    

Value

(In thousands)

December 31, 2020

Marketable securities

U.S. government and municipal obligations

Maturing in one year or less

$

40,328

$

3

$

(2)

$

40,329

Maturing after one year through three years

Total U.S. government and municipal obligations

$

40,328

$

3

$

(2)

$

40,329

Corporate debt securities

Maturing in one year or less

$

110,265

$

2

$

(10)

$

110,257

Maturing after one year through three years

Total corporate debt securities

$

110,265

$

2

$

(10)

$

110,257

Total marketable securities

$

150,593

$

5

$

(12)

$

150,586

The Company holds investment-grade marketable securities, and none were in a continuous unrealized loss position for more than twelve months as of September 30, 2021 and December 31, 2020. The unrealized losses are attributable to changes in interest rates and the Company does not believe any unrealized losses represent other-than-temporary impairments. Marketable securities include $0.8 million and $0.2 million in accrued interest at September 30, 2021 and December 31, 2020, respectively.

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(5)  Intangible Assets

At September 30, 2021 and December 31, 2020, the carrying value of the Company’s indefinite-lived intangible assets was $27.2 million and $30.7 million, respectively. Indefinite-lived intangible assets consist of acquired IPR&D related to the development of the anti-KIT program (including CDX-0159) and the TAM program, a broad antibody discovery effort to generate antibodies that modulate the TAM family of RTKs, comprised of Tyro3, AxL and MerTK. CDX-0159 is in Phase 1 development and the TAM program is in preclinical development. As of September 30, 2021, none of the Company’s IPR&D assets had reached technological feasibility nor did any have alternative future uses.

The Company performs an impairment test on IPR&D assets at least annually, or more frequently if events or changes in circumstances indicate that IPR&D assets may be impaired. During the fourth quarter of 2020, the Company decided that although it had developed promising data for the AxL target within the TAM program, it would focus its efforts on out-licensing opportunities for its TAM program. As a result, the Company evaluated the TAM program IPR&D asset for potential impairment due to the change in projected development and regulatory timelines related to the program and recorded a non-cash partial impairment charge of $14.5 million for the fourth quarter of 2020. During the third quarter of 2021, the Company evaluated its out-licensing progress since December 31, 2020 and the status and expectation for the TAM program. Despite the Company’s efforts to out-license, there was a lack of interest in the program from third parties. Therefore, the Company evaluated the TAM program IPR&D asset for potential impairment using a discounted cash flow fair value model and concluded that the TAM IPR&D asset was fully impaired. A non-cash impairment charge of $3.5 million was recorded for the three months ended September 30, 2021. As a result of the discontinuation of the CDX-3379 program in the second quarter of 2020, the Company concluded that the CDX-3379 IPR&D asset was fully impaired and a non-cash impairment charge of $3.5 million was recorded in the second quarter of 2020. Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of such clinical trials or other failures to achieve a commercially viable product, and as a result, may recognize further impairment losses in the future.

(6) Other Long-Term Liabilities

Other long-term liabilities include the following:

    

September 30, 

    

December 31, 

2021

2020

(In thousands)

Net deferred tax liabilities related to IPR&D (Note 11)

$

1,613

$

1,840

Contingent milestones (Note 3)

7,107

8,267

Deferred revenue (Note 10)

 

601

 

3,386

Total

 

9,321

 

13,493

Less current portion

 

(1,721)

 

(3,372)

Long-term portion

$

7,600

$

10,121

(7) Stockholders’ Equity

In May 2016, the Company entered into a controlled equity offering sales agreement (the “Cantor Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) to allow the Company to issue and sell shares of its common stock from time to time through Cantor, acting as agent. At September 30, 2021, the Company had $50.0 million remaining in aggregate gross offering price available under the Company’s November 2020 prospectus.

In July 2021, the Company issued 6,845,238 shares of its common stock in an underwritten public offering resulting in net proceeds to the Company of $269.9 million, after deducting underwriting fees and offering expenses.

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The changes in Stockholders’ Equity during the three and nine months ended September 30, 2021 and 2020 are summarized below:

    

    

    

    

Accumulated

    

    

Common

Common

Additional

Other

Total

Stock

Stock Par

Paid-In

Comprehensive

Accumulated

Stockholders’

Shares

Value

Capital

 Income

Deficit

 Equity

(In thousands, except share amounts)

Consolidated balance at December 31, 2020

 

39,603,771

 

$

40

 

$

1,279,824

 

$

2,589

 

$

(1,073,096)

 

$

209,357

Shares issued under stock option and employee stock purchase plans

 

10,867

 

 

 

 

74

 

 

 

 

 

 

74

Stock-based compensation

 

 

 

 

 

1,275

 

 

 

 

 

 

1,275

Unrealized loss on marketable securities

 

 

 

 

 

 

 

(2)

 

 

 

 

(2)

Net loss

 

 

 

 

 

 

 

 

 

(16,538)

 

 

(16,538)

Consolidated balance at March 31, 2021

 

39,614,638

 

$

40

 

$

1,281,173

 

$

2,587

 

$

(1,089,634)

 

$

194,166

Shares issued under stock option and employee stock purchase plans

 

2,058

 

 

 

 

(25)

 

 

 

 

 

 

(25)

Stock-based compensation

 

 

 

 

 

1,509

 

 

 

 

 

 

1,509

Unrealized gain on marketable securities

 

 

 

 

 

 

 

5

 

 

 

 

5

Net loss

 

 

 

 

 

 

 

 

 

(13,373)

 

(13,373)

Consolidated balance at June 30, 2021

 

39,616,696

$

40

$

1,282,657

$

2,592

$

(1,103,007)

$

182,282

Shares issued under stock option and employee stock purchase plans

201,406

2,004

2,004

Shares issued in underwritten offering, net

6,845,238

7

269,886

269,893

Stock-based compensation

3,029

3,029

Unrealized loss on marketable securities

(44)

(44)

Net loss

(20,452)

(20,452)

Consolidated balance at September 30, 2021

46,663,340

$

47

$

1,557,576

$

2,548

$

(1,123,459)

$

436,712

    

    

    

    

Accumulated

    

    

Common

Common

Additional

 Other

Total

 Stock

 Stock Par

 Paid-In

 Comprehensive

Accumulated 

Stockholders’

 Shares

 Value

 Capital

 Income

Deficit

 Equity

(In thousands, except share amounts)

Consolidated balance at December 31, 2019

 

16,972,077

$

17

$

1,104,706

$

2,619

$

(1,013,316)

$

94,026

Shares issued under stock option and employee stock purchase plans

 

12,573

 

 

24

 

 

 

24

Shares issued in connection with at the market agreement

 

746,152

 

1

 

1,613

 

 

 

1,614

Stock-based compensation

 

 

 

686

 

 

 

686

Unrealized loss on marketable securities

 

 

 

 

(22)

 

 

(22)

Net loss

 

 

 

 

 

(12,625)

 

(12,625)

Consolidated balance at March 31, 2020

 

17,730,802

$

18

$

1,107,029

$

2,597

$

(1,025,941)

$

83,703

Shares issued in connection with at the market agreement

 

5,978,452

 

6

 

23,686

 

 

 

23,692

Shares issued in underwritten offering, net

 

15,384,614

 

15

 

141,346

 

 

 

141,361

Stock-based compensation

 

 

 

722

 

 

 

722

Unrealized loss on marketable securities

 

 

 

 

(3)

 

 

(3)

Net loss

 

 

 

 

 

(11,031)

 

(11,031)

Consolidated balance at June 30, 2020

 

39,093,868

$

39

$

1,272,783

$

2,594

$

(1,036,972)

$

238,444

Shares issued under stock option and employee stock purchase plans

68,204

194

194

Shares issued in connection with at the market agreement

400,400

1

4,296

4,297

Stock-based compensation

1,250

1,250

Unrealized gain on marketable securities

14

14

Net loss

(14,224)

(14,224)

Consolidated balance at September 30, 2020

39,562,472

$

40

$

1,278,523

$

2,608

$

(1,051,196)

$

229,975

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(8)  Stock-Based Compensation

A summary of stock option activity for the nine months ended September 30, 2021 is as follows:

Weighted

Weighted

Average

Average

Exercise

Remaining

Price

Contractual

    

Shares

    

Per Share

    

Term (In Years)

Options outstanding at December 31, 2020

 

3,042,229

$

28.93

8.2

Granted

 

1,350,210

$

28.16

Exercised

 

(192,464)

$

9.53

Canceled

 

(70,349)

$

35.62

Options outstanding at September 30, 2021

 

4,129,626

$

29.46

8.2

Options vested and expected to vest at September 30, 2021

 

3,982,965

$

29.81

8.2

Options exercisable at September 30, 2021

 

1,387,147

$

51.75

6.7

Shares available for grant under the 2021 Plan

 

3,319,116

The weighted average grant-date fair value of stock options granted during the three and nine months ended September 30, 2021 was $41.34 and $21.86, respectively.

The aggregate intrinsic value of stock options vested and expected to vest at September 30, 2021 was $140.6 million. The aggregate intrinsic value of stock options exercisable at September 30, 2021 was $47.3 million. As of September 30, 2021, total compensation cost related to non-vested employee, consultant and non-employee director stock options not yet recognized was approximately $33.7 million, net of estimated forfeitures, which is expected to be recognized as expense over a weighted average period of 2.9 years.

Stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020 was recorded as follows:

Three months ended September 30, 

Nine months ended September 30, 

    

2021

    

2020

    

2021

    

2020

(In thousands)

(In thousands)

Research and development

$

1,504

$

642

$

2,927

$

1,294

General and administrative

 

1,525

 

608

 

2,886

 

1,364

Total stock-based compensation expense

$

3,029

$

1,250

$

5,813

$

2,658

The fair values of employee, consultant and non-employee director stock options granted during the three and nine months ended September 30, 2021 and 2020 were valued using the Black-Scholes option pricing model with the following assumptions:

Three months ended September 30, 

Nine months ended September 30, 

    

    

2021

2020

    

2021

    

2020

Expected stock price volatility

 

98%

98%

9798%

9198%

Expected option term

 

6.0 Years

6.0 Years

6.0 Years

6.0 Years

Risk-free interest rate

 

1.11.2%

0.5%

0.81.3%

0.50.6%

Expected dividend yield

 

None

None

None

None

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(9)  Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income, which is reported as a component of stockholders’ equity, for the nine months ended September 30, 2021 are summarized below:

Unrealized

Loss on

Marketable

Foreign

    

Securities

    

Currency Items

    

Total

(In thousands)

Balance at December 31, 2020

$

(7)

$

2,596

$

2,589

Other comprehensive loss

 

(41)

 

 

(41)

Balance at September 30, 2021

$

(48)

$

2,596

$

2,548

No amounts were reclassified out of accumulated other comprehensive income during the nine months ended September 30, 2021.

(10)  Revenue

Product Development and Licensing Revenue

The Company’s agreement with Rockefeller University, as amended (the “Rockefeller Agreement”), provides for the Company to perform manufacturing and development services for Rockefeller University for their portfolio of antibodies against HIV. This portfolio was licensed to Gilead Sciences in January 2020 from Rockefeller University (“Rockefeller Transaction”). Pursuant to the Rockefeller Agreement, the Company received an upfront payment of $1.8 million as a result of the Rockefeller Transaction which was recorded to revenue during the first quarter of 2020. The Company is eligible to receive additional payments from Rockefeller University if this portfolio progresses through clinical and commercial development.

Contract and Grants Revenue

The Company has entered into the Rockefeller Agreement and an agreement with Gilead Sciences pursuant to which the Company performs manufacturing and research and development services on a time-and-materials basis or at a negotiated fixed-price. The Company recognized $0.1 million and $4.0 million in revenue under these agreements during the three and nine months ended September 30, 2021, respectively, and $0.3 million and $0.9 million during the three and nine months ended September 30, 2020, respectively.

During the third quarter of 2020, the Company was awarded a Small Business Innovation Research (“SBIR”) grant from the National Institutes of Health (NIH) to support the Company’s CDX-1140 and CDX-301 programs. The Company recognized $0.0 million and $0.3 million in grant revenue under the award during the three and nine months ended September 30, 2021, respectively, and $0.3 million during the three and nine months ended September 30, 2020.

Contract Assets and Liabilities

At September 30, 2021 and December 31, 2020, the Company’s right to consideration under all contracts was considered unconditional, and as such, there were no recorded contract assets. At September 30, 2021, the Company had $0.6 million in contract liabilities recorded, which is expected to be recognized during the next 12 months as manufacturing and research and development services are performed. At December 31, 2020, the Company had $3.4 million in contract liabilities recorded. Revenue recognized from contract liabilities as of December 31, 2020 during the three and nine months ended September 30, 2021 was $0.0 million and $3.4 million, respectively.

(11)  Income Taxes

The Company has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets and considered its history of losses, ultimately concluding that it is “more likely than not” that the Company will not recognize the benefits of federal, state and foreign deferred tax assets and, as such, has maintained a full valuation allowance on its deferred tax assets as of September 30, 2021 and December 31, 2020.

13